The engineers of the Orange County Water District clearly demonstrate this with their willingness to investigate water reuse technologies as a solution to groundwater problems. Hence, the presence of a conservative technocratic civil service of water engineers is potentially a plus for the future adoption of a water reuse infrastructural projects.Institutions are the sets of common habits, routines, practices, rules, or laws that regulate the relations between individuals, networks, and organizations . It is difficult to write comprehensively of institutions as so many of the rules that underlie our conduct are often unwritten or simply established practices or cultural norms that generally go without saying. But the most important institutions are the legal institutions, the laws or ordinances that define the agents of our society and determine the rules of our markets. These laws define the actors—who is a firm, a non-profit organization, a special government agency, an inventor—and identify what rights actors have and how they can legally interact.The Federal and State governments use legal ordinances and tax codes to classify organizations according to legal status. A for-profit corporation has different rights and responsibilities than firms that are organized as partnerships, S-Corporations, sole proprietor ships, or nonprofits. Corporations have limited liability, so employees may lose their jobs and shareholders may lose their investment,nft channel but neither will be liable for the corporation’s debts. Such an organization has long been thought to encourage entrepreneurship and risk-taking . Nonprofits can file under the Federal tax code’s 501 status, granting them tax benefits which can allow these organizations to pursue appropriate goals without the additional burden of potentially onerous taxes. However, these rules also restrict some freedom of action and limit political activity .
Federal and State governments also arbitrate important legal instruments such as patents or financial tools like stocks and bonds. Our system of patent protection grants inventors a right to exclude others from making, using, selling, offering for sale, or a whole manner of other activities of their patented product or process for twenty years . This gives the patent holder a monopoly ensuring they have ample opportunity to profit from their invention. Financial instruments, such as the tax exempt municipal bonds discussed above, are another legal instrument that have a profound impact on the working of our economy. Generations of legal philosophers have composed libraries debating the theories of our various legal tools, and I have no interest in attempting to wade into such ground here. Here I will turn briefly to water rights—and particularly ground water rights. These legal instruments have a direct bearing on our study of Southern California’s burgeoning water reuse industry. In fact, they were central to Orange County’s groundwater reuse project, and will be critical for the potential growth of additional projects. Since the adoption of the 1928 reasonable use use doctrine, California water is protected for the use and benefit of all Californians . Water cannot be outright owned by individuals, groups, businesses, or governmental agencies. The state issues permits, licenses, and registrations to give individuals or organizations the right to use “reasonable amounts of water” . Like our collective legal system, water rights in the United States largely evolved from the English Common Law system. However, California has a long tradition of water litigation which has led to a “California Doctrine” that differs significantly from prevailing US norms . The California doctrine recognizes rights as valid if they are based on one of three factors: riparian rights—ownership of land near watercourse; appropriative rights—prior use of water, and groundwater rights—title of water rights underneath land. English common law traditionally valued riparian rights and granted land holders near absolute groundwater rights.
Appropriative rights privilege early water users over later users and became a common practice as settlers moved into arid American west to maintain peace. They are without basis in traditional English Common Law . California further broke with the English Common Law tradition by finding that groundwater was not solely the property of a land owner. Instead, California has a complex system based on both the rights of the landowner and a correlative rights tradition. Correlative rights are similar to riparian rights in that they are based on proximity to water, or in the case of groundwater, physical contiguity.Although Statewide there are only 22 adjudicated water basins, meaning that the rights have been settled and every individual or organization with a claim can use water but only in a sustainable manner, most of these are in urban areas . Adjudication can limit the freedom that a managing entity has over groundwater basins, often requiring additional negotiations. Sometimes these negotiations turn into difficult court cases . This is even further complicated if the groundwater basin is polluted, such as Los Angeles’s heavily industrialized San Fernando Valley where legal mandates have been handed down requiring that the various water rights holders must clean up the basin . Adjudicated basin agreements were primarily designed to control the allocation of water supply, not replenishment or the removal of contaminants, so this is still relatively unchartered legal territory . Overall, Southern California is rich in groundwater potential, with a total estimated available capacity in MWD’s service area of 3.2 million acre-feet. , however these reserves have been regularly over drafted . California law allows the creation of special districts to manage or replenish water sources. Today several districts, most notably the Water Replenishment District of Southern California , have plans to purchase excess MWD water and inject it into groundwater basins . However, there are complex legal issues involved in groundwater replenishment, particularly in adjudicated basins. WRD’s plan to inject 450,000 AF over two wet years when MWD water was plentiful was blocked in 2009 by a lawsuit from Central Basin Municipal Water District and the cities of Downey, Signal Hill, Cerritos, and the Tesoro Oil Company who protested the plan . In May 2012, the State Supreme court voted in favor of WRD. In 2012 water prices have risen, reflecting the drier weather of 2011,hydroponic nft which will make the groundwater injection plan much more costly. Additionally, untold millions in legal fees have been squandered on such inter agency lawsuits over groundwater.
Furthermore, attempts by the State to adopt new groundwater regulations have been strongly opposed by land owners, particularly agricultural interests and local water districts who are fearful that new rules will limit freedom of water use . In short, regional groundwater management is at best, inefficient, and at worst dysfunctional. Efforts to introduce truly comprehensive water management solutions, such as low impact development ordinances that mandate onsite storm water management that promote groundwater replenishment through natural processes of soil percolation are further hindered by additional institutional complexity. Cities control planning and land use, yet the state transportation department oversees the roads, while various public and private entities control land. It is very unlikely that California will ever see anything as far reaching as Netherland’s or Singapore’s recent reforms that created single ministries responsible for comprehensive water management. The complex legal structure that underlies groundwater rights in California has already had a major impact on the water reuse industry, and continues to in three primary ways. First, the Orange County Water District would not exist without being set up to protect the groundwater basin, and therefore never would have built Factory 21. Water districts with groundwater basins that are over-drafted, under threat of seawater, or are contaminated have an incentive to use the cheapest water that they can to replenish their supplies, therefore they may turn to water reuse as a source. Secondly water rights are one of the largest determinants of water price, which is the largest determent of private investment in innovative technologies . How an individual or a utility obtains its water supply is a huge factor in the price it pays for that water. For example, if a utility has ample high-quality groundwater sources available, its rates will be lower than if the utility needed to purchase or import its water supply . Conversely, if a utility does not have groundwater and needs to import its water supply, the cost of that water will almost always be higher. In Southern California, a water district or company with easily accessible groundwater has the freedom to choose its sources; it can purchase imported water from MWD when prices are low and pump when prices are high; these districts are unlikely to give up this low cost advantage. The legal complexity over adjudicated ground basin might persuade some districts to turn to water reuse. It is fairly clear that OCWD’s groundbreaking GWRS project would not have been undertaken without the alignment of groundwater water rights, storage capabilities, and clear compelling need. In my investigation I found that GRWS managers were certain that their complete control of the aquifer was critical to moving forward with the project .
Additional lawyers of complexity would have added costs and risks which might have imperiled the project . Market demand is the primary motivation behind new products or technologies, and the water industry is no different. If sufficient demand exists to justify investment, investment will often be made. In a market economy, if the cost is high then firms will seek out innovations—and it is hoped—be rewarded with market share. Specialized demand conditions often distinguish a regional industry and meeting that demand will often impart an advantage to the region. Water is not a product that is manufactured, nor is it strictly speaking, a commodity that is dug from the ground, but rather it is more a hybrid product that is both a renewable resource in the manner of agriculture that needs to be collected and transported, but also a product that can be derived from a recycling process. Furthermore, the water economy is not truly a market economy, for water is a public good that is critical to the functioning of our region. Water will often be delivered regardless of costs, and benefits greatly from implicit public subsidies. Water delivery is also a natural monopoly as the majority of its costs are infrastructural, the cost of physically placing pipe to carry water is very high and thought to account for up to 80% of the price of water , which is a significant barrier for potential competition. But like other markets, the primary driver behind innovation in the water technology industry is the cost and/or availability of water. If supply is limited and price is high, then investments will be made in technologies and/or process innovations. The four principle factors in the Southern California region are the availability of groundwater, weather , infrastructural capabilities, and legal constraints . The first three are fairly straightforward; rain needs to fall, the water needs to be accessible and the infrastructure must exist to collect it, clean, and deliver it. Legal constraints include considerations of legal water rights—who has claim to the water—as well as government mandates such as the Owen’s Valley court decision that limited water withdrawals for environmental causes, or the conservation mandates imposed during droughts. In practice, the diverse circumstances faced by the myriad of Southern Californian water agencies—regional wholesalers, distributors, local retailers, reclamation districts, replenishment districts, and private water companies—results in equally diverse pricing schemes making it difficult to identify the true cost of water in Southern California, and hence potential savings from investment in efficiency or technology improvements. Industry analysts have repeatedly cited the lack of transparency in water pricing, and particularly, the hidden subsidies, as impairing potential investment in water technologies . In my case studies, both Singapore and Australia made identifying the true cost of water a central platform in their respective water reforms to both encourage conservation and efficient allocation . Few Californians know how much it really costs to deliver water. All Interviewees working in the water industry agreed that California pricing schemes were confusing, and nearly all expressed a desire for prices to rise in order to increase investment . One notable exception worked for a public agency that delivered water. They agreed that truer pricing regimes would increase investment but also pointed out that cheap water was in keeping with their agencies public mission .